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GSEs’ Long Run of Declining Delinquencies Comes to an End

For the first time in over a year neither ""Fannie Mae"":http://www.fanniemae.com nor ""Freddie Mac"":http://www.freddiemac.com are showing any downward movement in their seriously delinquent mortgage rates.

Fannie's percentage of single-family loans at least three payments past due remained unchanged between the months of June and July at 4.08 percent, according to the latest ""monthly summary report"":http://www.fanniemae.com/ir/pdf/monthly/2011/073111.pdf published by the GSE.

Freddie's ""monthly report"":http://www.freddiemac.com/investors/volsum/pdf/0711mvs.pdf shows its 90-plus day delinquencies increased slightly from 3.50 percent in June to 3.51 percent in July.

The latest results break a long stretch of declining delinquency numbers for the two GSEs, but still come in significantly below the readings from as recently as 12 months earlier.

Fannie Mae's serious delinquency rate has fallen 74 basis points from 4.82 percent in July 2010, while Freddie Mac's has dropped 38 basis points from 3.89 percent a year ago.

A report released last week by the GSEs’ regulator, the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA), shows that


foreclosure prevention actions completed on loans held by the two mortgage financiers have declined for four consecutive quarters.

The waning numbers were driven by decreases in loan modifications and forbearance plans.

According to FHFA, the enterprises’ completed loan modifications decreased to approximately 81,200 in the second quarter of this year, down from 86,200 in the first quarter. But the federal agency says the majority of borrowers that received loan modifications in Q2 “had their monthly payments reduced substantially.”

Forbearance plans slipped from 12,601 over the first three months of the year to 7,713 during the second quarter. Repayment plans, however rose from 44,827 to 45,890.

Home forfeiture actions â€" including short sales and deeds-in-lieu â€" as a means to avert foreclosure rose quarter-to-quarter.

Between Fannie and Freddie, 29,483 short sales were completed during the second quarter, compared to 25,705 over the previous three-month period. Deeds-in-lieu increased from 1,849 in Q1 to 2,727 in Q2.

FHFA’s data show that the GSEs started approximately 9,000 fewer foreclosures during the second quarter than they did in the first. New foreclosures initiated during the April-to-June timeframe tallied 251,000.

At the same time, completed foreclosure sales to third-parties increased from 88,000 in Q1 to 94,000 in Q2.

REO inventory declined for the third consecutive quarter as property dispositions continue to outpace acquisitions in the second quarter. As of the end of June, Fannie and Freddie held some 196,000 repossessed homes on their books.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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